By Hamilton Nwosa and Abiola Olawale
Fidelity Bank, one of Nigeria’s leading financial institutions is presently caught in an alleged legal and compliance crossfire as Sagecom Concept Limited, a firm ensnared in a legal tussle with the bank, has petitioned the Central Bank of Nigeria (CBN), accusing the financial entity of alleged inappropriate presentation of its financials in a 2024 Annual Report by failing to disclose the sum of $129 million judgment liability.
According to reports monitored by The New Diplomat, Sagecom Concept Ltd, through its counsels in a letter signed by Adeyinka Olumide-Fusika, a Senior Advocate of Nigeria (SAN) of M.A. Banire & Associates/Citipoint, alleged in its entreaty to the CBN that Fidelity Bank deliberately downplayed its litigation obligations to delude shareholders and the public about the status of the Bank’s finances.
To Sagecom Concept Limited, the Bank played down its financial obligations in its 2024 Annual Report by reporting only about N2.274 billion as allotments for litigations and claims-notwithstanding that there is a subsisting judgment of about $129 million standing against it as at December 31, 2024. As a consequence, in its petition to the CBN addressed to Director of Banking Supervision, the law firm of M.A. Banire & Associates/Citipoint, acting on behalf of Sagecom urged the apex bank to carry out what it called a rigorous scrutiny of Fidelity Bank’s financial reports as they relate to 2024, claiming that there are “ blatant and deliberate mis-statements and misrepresentations.”
“By so doing, the impression was conveyed to its shareholders and the public at large that its liability on litigations and claims was reasonably within that range,” the law firm wrote. The lawyers also averred that the “misrepresentation” tend to suggests to Fidelity Bank shareholders and the general public that the Bank’s financial obligations as at December 2024 were minimal, and in fact, passable or permissible.
According to compliance analysts, failure by a Bank or financial institution to disclose accurate information regarding its financial status could potentially have far-reaching consequences depending on the jurisdiction or context in question. For example, in some jurisdictions, the far-reaching implications for an erring bank could mean penalties by regulatory agencies, legal action as well as reputational crisis. All efforts to reach Fidelity Bank on this lingering subject matter were unsuccessful. Repeated calls were also not returned.
The New Diplomat reports that the legal tussle between Sagecom and Fidelity Bank dates back to the early 2000s when a loan of about $3 million and N100million were reportedly extended by FSB International Bank which was later acquired by Fidelity Bank along with its assets and liabilities) to G. Cappa Plc. According to reports, the borrowing firm secured the loan with its properties in Ikoyi, Lagos and elsewhere. However, following G. Cappa’s default, Fidelity proceeded to enforce its decision to recover its funds by selling the properties in question to Sagecom in 2011. This was regardless of a prevailing court order which purportedly barred the bank from doing so.
However, there was a dramatic twist as G. Cappa proceeded to sue Fidelity Bank at the time, and a federal judge in Lagos ordered Fidelity to desist from depletion of the firm’s assets, court documents had alleged. However, Fidelity’s management allegedly failed to obey the court order and proceeded to list the assets for sale to potential buyers. This was how Sagecom came into the picture.
Meanwhile, Sagecom maintained that it proceeded to exercise caution and retrieve its payment to Fidelity Bank after observing a January 2006 disclaimer that stated that a court order had prevented Fidelity from selling G. Cappa’s assets.
This was how the seemingly innocuous case which began at the Lagos State High Court, travelled up to the Supreme Court in 2018, leading to a decisive judgement last month. However, while ruling on the matter on April 11, 2025, a five-justices panel unanimously held that Fidelity must proceed to pay for its decision to disregard a subsisting relief granted by a federal court in Lagos.
“At the heart of the matter lies the appellant’s somewhat egregious conduct in selling a property it knew was subject to a restraining court order,” the court said, adding that Fidelity deprived Sagecom of “the possession and the economic benefits of its purchase for many years.”
The justices lashed Fidelity Bank’s management conduct at the early stages of the dispute, stating that the bank admitted that it received notice of the injunction that blocked it from selling G. Cappa’s assets but still proceeded to sell off the assets. “This was not mere negligence but a deliberate disregard for both the court’s authority (with the intention to undermine it) and the first respondent’s rights as an innocent purchaser,” Justice Jummai Hannatu Sankey said in her concurring opinion.
“The appellant has failed to demonstrate any perversity in the findings of the lower courts or any miscarriage of justice warranting this court’s intervention,” the court added. The apex Court then upheld the damages awarded by the Lagos high court in a June 20, 2011, ruling against Fidelity. The court which praised the Lagos judge for what it called proper handling the case, consequently ordered Fidelity to equally offset all accrued earnings for several flats that Sagecom could not possess for years.
Following the Supreme Court judgement, Justice Olabisi Akinlade of the Lagos State High Court calculated damages due to Sagecom, declaring that as of May 16, 2025, Fidelity Bank owed the firm $139,064,896.18, value at (N225,285,131,812.38.)
Recall that this is not the first time Fidelity Bank is coming under storm. In 2016, it was alleged that the bank was involved in controversial deals involving the sum of $115million purportedly handed over to it by former Petroleum Resources Minister, Diezani Alison-Madueke.
In a statement at the time, the bank, while confirming ongoing investigations had, however, claimed that it acted appropriately. Its statement then read in part: “Our attention has been drawn to reports in the media on investigations into transactions undertaken by the Bank in the normal course of business in 2015. The transactions are now the subject matter of investigations by the Economic & Financial Crimes Commission (EFCC),” the bank said in a statement.
“We can confirm that the transactions were duly reported as required by the regulators and the Bank is cooperating fully with the authorities on the investigation. We assure our numerous stakeholders, including our customers that we are working assiduously towards a quick resolution of the issues.”
